Article published at 9:15 a.m. CT.
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Eli Lilly shares move higher after strong weight-loss drug sales
- Toy Story 5 was a big hit for Walt Disney
- SpaceX shares coast lower
As we’ve noted before, good earnings can help power the market and we’re seeing it again today as the rally continues.
The three major indices are on the high road in early trading after Tuesday’s showing in which the Nasdaq Composite and the Dow Jones Industrial Average logged record highs – again – and the S&P 500 Index finished the session above 7,700 for the first time.
Robust earnings from a number of major companies are driving the market, but it might be considered a nervous rally with the Cboe Volatility Index® (VIX® Index) moving 2.7% higher at 16.83. The Nasdaq is moving up 0.43% in early trading and the Dow is advancing 0.88%, while the S&P 500 Index is higher by 0.60%.
Can the market keep up the momentum? Hard to tell this early, but consider how much higher the indices did yesterday with the Nasdaq posting 671 points and the Dow closing with 907 points in the green.
Shares of Eli Lilly were moving higher after the drugmaker’s popular weight-loss and diabetes drugs propelled better-than-expected profits and sales in the second-quarter and prompted the firm to raise guidance. Worldwide sales of Mounjaro climbed 91%, underscoring strong growth for the GLP-1 drug internationally, while Zepbound sales grew 44%. Sales of Foundayo, its new weight-loss pill that hit the market in April, fell slightly short of expectations.
Walt Disney shares were on the high road after the House of the Mouse missed sales expectations but still turned in profits that outpaced Wall Street’s expectations. Studio revenues were pumped by the Toy Story 5 hit, while streaming services profits rose better than twofold and theme park attendance grew by 3%. Shares advanced by 3.6% in the early going.
SpaceX shares are back on the downside of the roller coaster despite the satellite, rocket and AI giant reporting its first earnings as a public company that far exceeded Wall Street’s expectations. However, investors were taken aback by capital expenditures, which were also well ahead of forecasts.
Revenues streamed in 92% higher on a year-over-year basis. SpaceX did not produce a profit, but that was expected. The surprise, however, was that the $0.09 per share loss was far better than the $0.24 to $0.26 widely expected.
Capex spending was 65% higher than forecast and the company told investors to prepare for that level of spending to continue over the next two quarters. Shares were falling 12%, wiping out most of Tuesday’s 11% gains.
Advanced Micro Devices shares are also falling 6.1% after the chipmaker moderately outran sales expectations as data center revenues turned higher by 107%. But capital expenditures nearly tripled from forecasts, spooking investors, and AMD did not offer future capex guidance.
Uber shares were backtracking in early trading after the on-demand transportation firm barely met Wall Street’s profit projections and fell short on revenue. Despite growth in the delivery end of the business, Uber’s forecast was slightly below expectations, sending shares lower by 3%.
Wayfair share price swelled 30% yesterday after the home goods retailer beat Wall Street’s second-quarter estimates in what the company called its best post-pandemic U.S. growth. Higher-income consumers were powering results, as its Perigold luxury brand said sales rang up 35% higher on a year-over-year basis. Wayfair forecast high single-digit sales growth in the third quarter. Shares were off 3.2% in early trading.
Happy trading!
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